CPCU 530 Test Questions
with Correct Answers
Bailor - Answer-The owner of the personal property in a bailment.
Implied-in-law contract - Answer-An obligation that is not an actual contract but that is
imposed by law because of the parties' conduct or some special relationship between
them or...
CPCU 530 Test Questions
with Correct Answers
Bailor - Answer-The owner of the personal property in a bailment.
Implied-in-law contract - Answer-An obligation that is not an actual contract but that is
imposed by law because of the parties' conduct or some special relationship between
them or because one of them would otherwise be unjustly enriched
Implied-in-fact contract - Answer-A contract that is not express but that the parties
presumably intended, either by tacit understanding or by the assumption that it existed
Indemnify - Answer-To restore a party who has sustained a loss to the same financial
position that party held before the loss occurred.
Accession - Answer-An increase or addition to property.
Doctrine of stare decisis - Answer-The principle that lower courts must follow
precedents set by higher courts
Equity - Answer-Fairness, or a body of principles constituting what is fair and right
Criminal law - Answer-The branch of the law that imposes penalties for wrongs against
society
Substantive law - Answer-classification of law that creates, defines, and regulates
parties' rights, duties, and powers.
Procedural law - Answer-A classification of law that prescribes the steps, or processes,
for enforcing the rights and duties defined by substantive law.
Equal Protection Clause - Answer-A part of the Fourteenth Amendment to the U.S.
Constitution prohibiting state laws that discriminate unfairly or arbitrarily, and requiring
equal treatment to all persons under like circumstances and conditions
Arbitration - Answer-An alternative dispute resolution (ADR) method by which disputing
parties use a neutral outside party to examine the issues and develop a settlement,
which can be final and binding.
, Consideration - Answer-Something of value or bargained for and exchanged by the
parties to a contract.
Third-party beneficiary - Answer-A person who is not a party to a contract but who
benefits from it and has a legal right to enforce the contract if it is breached by either of
the contracting parties.
Third-party beneficiary contract - Answer-A contract between two parties that benefits a
third party
Privity of contract - Answer-The relationship that exists between the parties to a
contract.
Bad faith (outrage) - Answer-An intentional or reckless act, extreme or outrageous in
nature, causing severe emotional distress that results in physical injury; generally
applied in suits for breach of insurance contracts.
Breach of contract - Answer-The failure, without legal excuse, to fulfill a contractual
promise
Consequential damages - Answer-A payment awarded by a court to indemnify an
injured party for losses that result indirectly from a wrong such as a breach of contract
or a tort.
Express waiver - Answer-A statement relinquishing a right that arose because of a
breach of contract
Tort - Answer-a wrongful act or an omission, other than a crime or a breach of contract,
that invades a legally protected right.
Tort law - Answer-The branch of civil law that deals with civil wrongs other than
breaches of contract.
Promisor - Answer-The party to a contract making a promise
Bilateral contract - Answer-A contract in which each party promises a performance.
Collateral estoppel - Answer-A doctrine that bars parties from relitigating an issue on
which a court has already ruled, even if the second lawsuit differs significantly from the
first.
Collateral source rule - Answer-A legal doctrine that provides that the damages owed to
a victim should not be reduced because the victim is entitled to recover money from
other sources, such as an insurance policy.
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